Budget: Saving for Retirement

Lord Davies of Oldham Excerpts

Thursday 16th March 2017 Lords Chamber

[Baroness Neville-Rolfe]

I thank the noble Baroness for that and for all she does in this important area. I think we have a clear sense of direction and a plan to restructure our finances and to invest in the future. Of course, all taxes and reliefs are kept under review through the annual Budget process. Our priority has been to increase the personal allowance, which benefits everyone. The lifetime ISA, which comes into operation very shortly, complements automatic enrolment, which will help people to save so much more. All these changes will help people. I know that the changes to automatic enrolment are expected to generate an estimated £17 billion a year more in total workplace pensions saving by 2019-20. I know noble Lords here were involved in that. It will make a lot of difference. Obviously, we have longer-term problems but the sense of direction is important.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister is fiddling when, for so many people, Rome is burning. How are the just-managing meant to cope with a situation where there has not been a pay increase for the duration of this Government—a situation unparalleled since 1800? That is the crisis facing our people at present. It is therefore not surprising that unsecured household debt rose dramatically last year. No wonder the savings ratio fell last year from 2% to -0.03%. How can people save when living standards decline for the many—while, of course, lavish wage increases occur for the few, buttressed by a taxation policy that favours them?

[Baroness Neville-Rolfe]

As we have discussed before, living standards have been rising. Yesterday, it was announced that we had a record number in employment and a 40-year low in unemployment. Getting people into work makes a huge difference. We made a series of proposals in relation to both pensions—this step change with auto-enrolment—and savings products that help people to save. The most important thing is to have a plan to restore our finances—we inherited a considerable mess—for everyone in this country, and for our children and our children’s children.